DHL Express Moving to Cincinnati

DHL will move its reduced U.S. package sorting operations from Wilmington, Ohio, to Cincinnati, the airport the express carrier left four years ago in its efforts to mount an ambitious plan in North America.

State officials in Kentucky used a $1.8 million tax incentive package to lure DHL back to the large sorting hub at Cincinnati/Northern Kentucky International that had been sitting idle since DHL consolidated its air express operations in Wilmington in 2005.

The decision also formally ends a prospective tie-up between DHL and UPS.

Deutsche Post-owned DHL had said in May 2008 it was in negotiations to have UPS provide air services to the rival express carrier. But those talks largely collapsed at the end of last year, a few months after DHL announced it was largely withdrawing from U.S. domestic express services.

The move to Cincinnati will cost Wilmington’s small, largely all-cargo airport about half the 3,000 jobs that had been left in the wake of the DHL restructuring, officials said.

DHL’s earlier decision to reduce its operations prompted sharp protests and the new announcement brought criticism from politicians in Ohio who said DHL did not approach them before the latest decision. “I don’t know if we could have retained the jobs,” Ohio Lt. Gov. Lee Fischer said at a press conference Friday. “But I would feel better and feel we would have been treated more fairly if that had happened.”

The parent of ABX Air, which provides air transport services in the United States to DHL, said it does not expect the move to Cincinnati to affect its DHL agreement. Air Transport Services Group said that agreement remains in place until at least August 2010 unless either ABX or DHL gives one year’s notice to end the pact.